VOD provider Akimbo seeks buyer, dismisses staff

IDG News Service — Fri, 23 May 2008 14:15:56 -0700

Unable to raise $4 million in needed outside capital, Internet video-on-demand provider Akimbo of San Mateo, Calif., Thursday laid off most of its employees, including all but one of its executives, and is searching for a buyer, Peter Shantel, Akimbo's chief financial officer, confirmed today.

"We went to market in February with a new strategy that was very exciting and very well received," Shantel said.

"We had recapitalized with $4 million from inside investors, and wanted to raise another $4 million from the outside. But the (video-on-demand) market is very crowded and there's a credit crunch. The board thought because we couldn't raise additional funds that we need to look for a strategic partner to buy us."

He declined to comment whether the company is currently negotiating with potential partners. Akimbo VOD solution is being used by AT&T Homezone, CenturyTel, an Internet service provider, and Mass TV, as a white label product. Akimbo competes with Brightcove, Extend, Intrigue, Narrowstep and other VOD solutions.

Shantel said Akimbo is attractive to suitors because "our solution works well, we have customers, and as SaaS (software as a service) solution it scales."

Shantel said the company's board of directors, chaired by William R. Hearst III, a partner in Kleiner, Perkins, Caufield & Byers, kept on a skeleton crew to support the company's three customers and dismissed 14 employees including CEO and president Thomas Frank and the rest of the management team.

When it introduced its player in 2004, Akimbo was the first company to bring Internet video to televisions.

In February, Akimbo refashioned itself and introduced a turn-key Internet VOD solution for content providers' Web sites that includes a comprehensive advertising system and supports multiple business models including ad-supported, transactional, subscription, download-to-own, download-to-burn, pay-per-minute, gift cards, and account credits.

In March, Akimbo had appointed 25-year industry veteran Phil Sakakihara as chief technology officer and Brant J. Smith, as marketing director. Both were dismissed yesterday.

Besides Hearst, Akimbo's board members are Andreas Stavropoulos, managing director of Draper Fishe Jurvestson; Frank M. Creer, managing director, Zone Ventures; and Dave Habiger, president and chief executive officer of Sonic Solutions. Investors are Kleiner, Perkins, Caufield & Byers, Draper Fisher Jurvestson, Zone Ventures, Sonic Solutions, AT&T, Blueprint Ventures, Cisco Systems, Sprout Group, and Wasatch Venture Funds.

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